While the residential market may be showing some signs of recovery, vacancies in commercial properties continue to rise at an alarming rate. In short, non-enclosed shopping centers reached a 10.3% vacancy rate ending in the third quarter of 2009, and enclosed malls jumped to 8.6%.
And it certainly is not looking to get better for some time. As vacancies increased, average rents declined to $16.89 per square foot for non-enclosed centers and down to $39.18 for enclosed malls. Likewise, the Federal Reserve has reported 8,300 store closings including 1,500 large anchor stores in 2009 alone.
Nationwide, office vacancies and rents are faring worse. The vacancy rate, in office properties hit a five-year high at 16.5% in the third quarter of this year. The decline in occupancy came as 19.6 million square feet of office space was returned to landlords in the third quarter and 64.2 million for the year.
As bad as the current environment is for landlords, things will become bleaker as unemployment rises because office occupancy tends to trail employment by 18 to 24 months.
In the past several years, much has been written about the proposed and controversial redevelopment plans for the boardwalk and adjacent amusement parks of Coney Island. While a great deal of the attention has been focused on the redevelopment plans of Thor Equities, the once popular Brooklyn seaside resort does not lack in alternative schemes suggested by everyone from theme park managers to the Bloomberg administration to the Municipal Art Society of New York.
In short, opposition to Thor’s plan have been centered around the firm’s plan for as many as a 1,000 hotel rooms and 500,000 square feet of retail space including some big boxes. Alternative suggestions for Coney Island range from “three or four wind in your face rides” to an “eye-popping” attraction akin to the London Eye – not bad suggestions but clearly the product of observers that lack a real sense of the historic Coney Island, let alone what is requires to make the redevelopment an economic success. Read More
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Over the past 6 weeks we have seen our daily readership of our blogs and traffic to our web site almost double. Visitors vary widely and range from Brazil to Southeast Asia and from the Middle East and India to Europe and North America. As our readership continues to grow we will add many new points of view and share more insights derived from our projects and clients located around the world. As we grow, we want you to feel at home in our next generation of community building with the introduction of MyVillageSolution.com early next year. You can help us grow by adding your own points of view to our blogs and sending your friends links to our site.
Occasionally, one of our readers will ask us questions concerning the services we provide. In brief, we are marketplace crafters in the sense that we define a market opportunity and then craft a built environment to answer the needs of merchants, restaurants, entertainment venues and most importantly the consumer. On the surface, it may appear to the more casual reader that we are something between architects and real estate developers. While we posses many of the same skills, our core competency is our ability to interpret trends both current and future in contemporary culture and translate those into the marketplace. As such, we do extensive market research, create multi retail marketplace concepts, direct the design execution and recruit merchants.
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Below is a reprint of the Broken Sidewalk articel on Creation Gardens and the Service Welding and Machine site.
Concept plan of how the Service Tanks block could one day be redeveloped
Faced with the uncertain future of its current location in the path of the planned Spaghetti Junction expansion and looking for room to expand, Creation Gardens, a local distributor of wholesale produce and gourmet foods, plans to relocate its facilities into the heart of the East Market Street – Nulu corridor.
Creation Gardens owners Ron and Mollie Turnier have placed three parcels on East Market between Clay and Shelby Streets under contract and plan to build a state-of-the-art retail and commercial distribution center on the corner of Market and Shelby Streets. The land is currently occupied by the Neurath & Underwood Funeral Home and a gravel lot used to store tanks for the adjacent Service Welding and Machine business which will to continue to operate at its current location. Read More
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Below is a reprint of the article about Village Solutions’ Bellegrove project from Broken Sidewalk.
Bellegrove Executive Campus Rendering
There’s more development activity set for downtown Anchorage, which has been slowly transforming itself over the last couple of years. This time, Village Solutions plans to convert two historic structures and build several new buildings in an effort to create a unique office development centered around a formal English courtyard. The property once belonged to Belleview Home, but was recently sold for redevelopment.
Village Solutions plans to eventually build three new Jeffersonian-style structures to match the historic architecture, anchored by Boone Hall, the original girl’s dormitory at Bellwood. The development, dubbed Bellegrove strives to preserve and protect the environment and create an abundance of green space and gardens. Developer Rick Hill envisions 5 buildings in a botanical garden setting with groves of 100 year old trees all around. Already, a creative center is finishing up construction and a reproduction facility for large-format graphics and printing is planned.
Plans call for leaving much of the 4.5 acre site open. A large “outdoor living room” will link the new structures, that, when complete, could encompass around 22,000 square feet. The site could have supported more than double the space under conventional development standards, but Hill wanted to create a special project for the historic neighborhood. He studied the original layout of the buildings to maintain a perceived master plan following Olmsted principles. Read More
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Below is a reprint of the Courier Journal article on Creation Gardens.
The owners of Creation Gardens, a distributor of produce to restaurants and the food-service industry, plans to move to a new site and expand their business.
Ron and Mollie Turnier have signed contracts to purchase about two acres of property on the northwest corner of Market and Shelby streets, including the Neurath & Underwood Funeral Home.
They plan to build a retail and commercial distribution center, featuring a 27,000 square foot building. It would include a 17,000-square-foot, regional fresh-food and produce distribution center primarily for commercial customers and a 10,000-square-foot market open to the public. Read More
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Whole Foods
Sales at Whole Foods continue to slide with sales down 4.8% in their last quarter. The upscale super market is facing new competition from the major chains such as Kroger and Safeway and has a core shopper problem that buys items rather than an entire cart of goods. Likewise, many of their core shoppers have switched to cheaper goods within the store and to lower priced retailers such as Traders Joe.
On top of competitive and consumer problems the company is trying to swallow a pill of bad real estate decisions. A combination of too many stores in marginal markets; markets that are too small for a new generation of larger stores up to 80,000 square feet; and high rents have significantly reduced profits. In response the chain has slowed new store openings from a planned 25-30 for 2009 but openings have been scaled back to 15.
More importantly, Whole Foods has begun a major repositioning program where it is moving away from gourmet foods to natural food and healthy eating. Likewise, founder John Mackey has vowed to remove the junk food from his store. Makes you wonder how he is going to fill up all of those oversized stores acquired in the last few years.
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Posted in Retail | 1 Comment »
The media is quick to point out the dismal sales performance of numerous retail chains. Reports of significant decreases in comp sales are reported daily and full economic recovery is clearly tied to a resurgence of retail sales. While, the end of the recession may be near, retail sales will lag far behind a recovery. Why? There are too many consumers with too much debt, high unemployment, and homes under water to consider shopping for anything other than necessities. With consumer expenditures accounting for almost 70% of all economic activity and without a confident consumer, retail sales are going to continue in their depressed state, even as other signs of a recovery appear to be positive.
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